Wednesday, April 06, 2011

Net Contributors

"In Minnesota’s case, we’re going to take the [stimulus] money, because we’re a major subsidizer of the federal government. For every dollar we send in, we only get 72 cents back, so we’re going to accept the money, because we’re paying the bill."
When Republicans in Minnesota struggle for a way to reconcile bashing the federal government with accepting federal funding, the go-to strategy is "Minnesota is a net contributor to the federal government." Just yesterday, Rep. Jim Abeler (R - Coon Rapids) used it in the House Ways and Means Committee in parrying Rep. Buesgens' complaint that Minnesota was taking federal money financed by debt.

The "net contributor" argument has the virtue of being true, and according to the most recent statistics, it's even more extreme than Pawlenty's statistics. Minnesota received 54 cents in federal spending for every federal tax dollar sent to D.C from 2007 - 2009. That ranks us at 49th of the 50 states. Compare that to the libertarian utopias that the Minnesota GOP wants us to emulate:
North Dakota #11 - received $1.93 for every dollar paid in taxes
South Dakota #13 - received $1.82 for every dollar paid in taxes
Indiana #25 - received $1.26 for every dollar paid in taxes
But this is not about hypocrisy, well, at least not *that* hypocrisy. It's about another double standard. While it's perfectly acceptable for Republicans to make the net contributor argument when it comes to federal money, they're targeting Minnesota's net contributors for massive cuts in LGA.

Mayor R.T. Rybak points out that Minneapolis sent $2.86 billion in sales and property taxes to the State of Minnesota from 2003 - 2008. I wrote earlier of the hypocrisy of Rep. Linda Runbeck in protecting cities in her district from LGA cuts, and noted that Minneapolis sends 4 sales tax dollars to the state for every one dollar in LGA it receives. The economic engines of this state are cities, and they are the net contributors to Minnesota's tax coffers.

This shouldn't be surprising. We know in Minnesota that the metropolitan area functionally subsidizes the rest of the state. According to Minnesota House Research:

There's nothing inherently wrong with this. As Mayors Rybak, Coleman and Ness have stressed, we are one Minnesota that rises and falls together. But if the "net contributor" argument is persuasive on the federal level, it ought to be persuasive on the state level as well.

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